While Bitcoin Ordinals and memecoins on Solana have been dominating headlines, the trend of tokenizing non-crypto assets shows no sign of slowing down.<\/p>\n
The community behind Frax Finance<\/a>, the multifaceted stablecoin protocol, has voted<\/a> to deploy $20M of its collateral into U.S. Treasuries.<\/p>\n Frax is leveraging an offering from Centrifuge, a company which has emerged as a leader<\/a> in the real world asset (RWA) space this year. The collateral backs Frax\u2019s stablecoins, the most prominent of which is FRAX, a U.S. dollar-pegged asset with a $648M market capitalization.<\/p>\n \u201cThey\u2019re effectively taking some of their stablecoin collateral and replacing it with T-bills,\u201d Lucas Vogelsang<\/a>, the founder of Centrifuge, told The Defiant.<\/p>\n Frax will be deploying the assets through Centrifuge Prime, a product which offers off-the-shelf solutions for DAOs looking to diversify their war chests. Prime provides the technical, legal, and financial infrastructure for DAOs to invest in RWAs.<\/p>\n Vogelsang sees Prime as filling a key need for DAOs beyond just exposure to U.S. treasuries. \u201c[DAOs] need help in their governance processes,\u201d he said. \u201cThey need transparent reporting that the whole DAO can see, they need the legal structure.\u201d<\/p>\n With benchmark interest rates in the U.S. at their highest level since 2001, Treasuries have attracted significant interest<\/a> in crypto. The latest vote by Frax\u2019s DAO shows the continued demand from crypto projects to diversify their holdings beyond crypto assets.<\/p>\n Current DeFi yields are generally lower than those offered by traditional financial products, pushing DAOs to explore RWA solutions. \u201cBecause Treasury bill interest rates shot up so much, the most attractive thing to do is take your stablecoins and turn them into tokenized T-bills,\u201d Vogelsang said.<\/p>\n MakerDAO, the collateralized lending platform, made a major move last year when it deployed<\/a> $500M into Treasuries and corporate bonds. Other projects like Ondo Finance shook up<\/a> the space further by offering tokenized Treasuries earlier this year.<\/p>\n The total value of tokenized Treasuries is $775.4M<\/a> as of Dec. 19.<\/p>\n\n
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